W.R. Grace: Prosecutors Ask for Delay of Trial for Appeal

The prosecution team in the trial of W.R. Grace & Co. has asked the presiding judge to delay the trial until a higher court weighs in on an appeal of three rulings that prosecutors believe damage the federal government's case against W.R. Grace.

W.R. Grace and seven of its current and former executives were indicted on Feb. 7, 2005, on charges of conspiring to hide the health hazards of the company's asbestos-contaminated vermiculite mine in Libby, in addition to charges of obstruction of justice, wire fraud and violating the Clean Air Act.

The prosecution on Aug. 23 filed a notice that it planned to appeal three of U.S. District Judge Donald Molloy's rulings in the trial, which is scheduled to begin on Sept. 11 for all but two of the defendants.

However, Molloy noted in an Aug. 27 ruling that the federal government still was weighing whether to go forward with the appeal, which would be filed with the 9th U.S. Circuit Court of Appeals. A phone call placed to the U.S. Attorney's Office for the District of Montana was not immediately returned.

In an Aug. 27 order granting the prosecution's request to delay the trial until the appeal is resolved, Molloy lamented the fact that his desire to start the trial on Sept. 11 "will be unfulfilled." He also urged the federal government, in a footnote, to reach a decision on whether to file the appeal.

Despite Molloy's desire "for a speedy and efficient resolution of this case," Molloy in July ruled that two of the defendants W.R. Grace in-house legal counsel O. Mario Favorito and former Libby mine manager Alan Stringer can be tried separately from the rest of the defendants, beginning on March 19, 2007.

Molloy's Rulings Exclude "Critical" Evidence

One of the rulings under appeal is Molloy's July 27 decision to dismiss one of two parts of the conspiracy count of the indictment. Molloy dismissed the knowing endangerment object of Count I found in paragraph 71(a) of the indictment which alleges W.R. Grace violated the Clean Air Act by releasing asbestos into the ambient air with the knowledge that this activity endangered the health of W.R. Grace employees and their families and residents of Libby and the surrounding areas. The other object of Count I, which remains in the indictment, alleges W.R. Grace conspired to defraud the government.

Prosecutors also said they are appealing a ruling that excludes the government's asbestos sampling evidence and analytical results and another ruling that gives the defense the option of presenting a Clean Air Act affirmative defense of "compliance with a 'visible emissions' standard."

The three rulings, "individually and collectively, exclude relevant and critical evidence, limit the government's ability to present its case-in-chief on the charges indicted by the grand jury and permit the defendants to raise an affirmative defense that further undermines the government's case," prosecutors wrote in their motion to delay the trial.

Molloy first dismissed the knowing endangerment object of the conspiracy count on June 8, agreeing with a motion filed by W.R. Grace attorneys asserting the object is barred by the statute of limitations.

Prosecutors obtained a superseding indictment on June 26 that still contained the knowing endangerment part of the conspiracy count, along with some additional language to support the government's assertion that the knowing endangerment object should be included. The superseding indictment also dropped the two wire fraud charges contained in the original indictment.

W.R. Grace filed a second motion to dismiss the knowing endangerment object. On July 27, Molloy granted the motion.

For more on previous developments in the W.R. Grace trial, read "W.R. Grace Trial: Favorito, Stringer Will Be Tried Separately", "W.R. Grace: Judge Denies Defense Request for Delay of Trial" and "Grand Jury Indictment: W.R. Grace Lied About Dangers of Asbestos Exposure."

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